South Indian Bank Limited · NSE:SOUTHBANK
South Indian Bank — The South Indian Bank — Q3 FY2024 Earnings Presentation
41 slides from South Indian Bank's earnings presentation, Jan 18, 2024
Slide 1: Cover letter to stock exchanges: Presentation to Investors and Analysts
DEPT.: SECRETARIAL REF. No. : SEC/ST.EX.STT/ 184/2023-24 DATE : January 18, 2024 National Stock Exchange of India Ltd., BSE Ltd. Exchange Plaza, 5th Floor, Department of Corporate Services (Listing), Plot No.C/1, G Block, First Floor, New Trading Wing, Bandra-Kurla Complex, Bandra (E), Rotunda Build
Slide 2: Investor Presentation Q3-FY 2024
Investor Presentation Investor Presentation Q3-FY 2024 Q3-FY 2024 1
Slide 3: Disclaimer
Disclaimer No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certai
Slide 4: Table of contents
Table of contents A Brief Snapshot B Transformation Journey of the Bank C About South Indian Bank – Key Investment Highlights D Annexures 3
Slide 5: Brief Snapshot
Brief Snapshot Transformation Journey of the Bank About South Indian Bank – Key Highlights Annexure 4
Slide 6: Brief Snapshot (Dec'23)
Brief Snapshot (Dec’23) Multi-pronged Maintaining healthy Consistently delivering Large Scale distribution strategy asset quality robust shareholder returns 4.74% INR 77,686 Cr 948 / 9,939 GNPA INR 782.5 Cr Total Advances Branches/ Employees PAT 1.61% NNPA INR 65,805 Cr 26 / 4 3.28% Disbursement (9M
Slide 7: Transformation Journey of the Bank
Brief Snapshot Transformation Journey of the Bank About South Indian Bank – Key Highlights Annexure 6
Slide 8: Significant transformation of business since September 2020
Significant transformation of business since September 2020 Churned around 67% of overall loan book since October 1, 2020 As of Key Considerations in Current Book ( As of Dec’23) Sep’20 transformation Journey Overall Rs. in crore Old Book New Book Old Book Book Focus on A+ rated in large Loan book
Slide 9: Leading to improvement in various key metrics - Sep 2020 vs Dec 2023
Leading to improvement in various key metrics- Sep 2020 vs Dec 2023 Total Business Gross Advances Retail Deposits CASA Rs. in Crore Rs. in Crore Rs. in Crore Rs. in Crore +19% +19% +27% 77,686 27.8 % 31.8 % 1,76,841 95,088 31,529 +37% 65,349 74,976 1,47,970 22,978 Sep'20 Dec'23 Sep'20 Dec'23 Sep'20
Slide 10: About South Indian Bank – Key Highlights
Brief Snapshot Transformation Journey of the Bank About South Indian Bank – Key Highlights Annexure 9
Slide 11: Key Highlights
Key Highlights 06 Diversified Loan Book with focus Strong Management team and on A-rated corporate loans 01 05 robust Financial Performance Pan India presence with focus on Focus on Digital channel to drive diversification operating efficiency 04 Strong focus on Asset Quality and Well Distributed De
Slide 12: #1. Diversified Loan Book with granularity and growth
#1. Diversified Loan Book with granularity and growth Well diversified loan book with ~62% other than corporates Focused on Granularity with reduction in ticket size* Rs. in Crore 66,274 68,383 74,004 19% 18% 20% 25% 10% 12% 38% 17% 8% Corporate 15% 12% Personal Segment 55% 53% 55% 20% Business Loan
Slide 13: #1. Increasing share of A rated corporate loans
#1. Increasing share of A rated corporate loans Corporate Loan Book * Standard Large Corporate Advances (Rs. in Crore) (Rs.100 Cr & above ) 29,892 (Rs. in Crore) 18,143 27,522 27,491 13,705 22,174 23,523 9,437 6,516 6,867 23 3,177 19 15 10 11 5 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Dec-23 Dec-22 Mar-23
Slide 14: #1. MSME Loans comprise mainly of High-Yield Portfolio
#1. MSME Loans comprise mainly of High-Yield Portfolio Focus on MSME segment in business loan… Geographic split Rs. in Crore Rest of India 23% Others Kerala 33% Dec’23 42% Dec’23 Rs. Rs. 15,424 Cr 15,424 Cr MSME/SME South (Ex-Kerala) 67% 35% MSME strategic initiatives …while creating a granular and
Slide 15: #2. Pan India presence with focus on diversification
#2. Pan India presence with focus on diversification 01 Diversifying Loan Book outside Kerala… 01 Rest of Rest of 05 01 India India Kerala Kerala 01 26% 30% 36% 40% Rs. 06 26 Rs. 70,117 Cr 77,686 Cr 11 01 03 02 01 South (Ex- South (Ex- 02 01 Kerala) Kerala) 02 34% 34% 04 03 20 01 Dec-22 23 Dec-23 03
Slide 16: #3. Strong focus on improving asset quality and collection efficiency
#3. Strong focus on improving asset quality and collection efficiency Net NPA below pre-covid level …with focus on Recoveries and Upgrades 6.97 1814 5.90 Rs. in crore 4.92 4.98 5.14 1464 4.71 4.74 1216 3.45 3.34 2.97 1.86 1.61 690 530 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Dec-23 Gross NPA % Net NPA % F
Slide 17: #4. Well Distributed Deposit Base with stable Cost of Funds
#4. Well Distributed Deposit Base with stable Cost of Funds Breakup of Deposits Rs. in Crore Yield on funds and Cost of funds 97,085 99,155 Cost Of Funds Yield on Funds 95,499 90,672 91,651 7.09 7.44 7.34 7.49 7.53 4.41 4.57 4.71 62,348 63,559 4.01 4.21 60,876 58,000 59,387 Q3FY23 Q4FY23 Q1FY24 Q2FY
Slide 18: #5. Digital Banking has been rising
#5. Digital Banking has been rising… Taken various digital initiatives… …leading to a rise in transactions with a high digital share 3500.0(000)’s 2828.2 98.0% Digital Onboarding 2627.7 3035.597.5% Customer Experience 3000.0 2459.1 97.0% 2500.0 2258.9 97.5% 96.5% Developed a platform for Video KYC
Slide 19: …creating operational efficiency
…creating operational efficiency Employee Additions Cost-to-Income Ratio (Quarterly) 74.30% 58.07% 61.19% 61.98% 53.30% -47 227 129 77 -14 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 includes SR provision of Rs.312 Crore Improving productivity metrics (Rs.
Slide 20: #6. Robust Track Record of Financial Performance
#6. Robust Track Record of Financial Performance Total Business Gross Advances Disbursements Rs. in Crore Rs. in Crore Rs. in Crore 65,805 1,76,840 1,63,743 77,686 1,48,558 1,50,957 72,092 36,957 1,42,128 65,524 59,418 61,816 16,860 FY20 FY21 FY22 FY23 9M'FY24 FY20 FY21 FY22 FY23 9M'FY24 Dec-21 Jan-
Slide 21: #6. Strong Management Team
#6. Strong Management Team Mr. P R Seshadri MD & CEO, 30 years Mr. Thomas Joseph K Bachelor’s degree in Engineering from the Delhi College of Engineering EVP & Chief Business Officer, 39 years and a Post Graduate Diploma in Management from IIM Bangalore. Bachelors Degree in Engineering and Diploma i
Slide 22: #6. Strong Management Team
#6. Strong Management Team Mr. Sony A SGM & CIO, 31 years Certified Information Systems Auditor from ISACA, USA and MBA. Over Ms. Biji S S 27 years of experience in banking technology. Instrumental in setting up key systems like Business Process. SGM & Group Business Head, 29 years Management tools,
Slide 23: #6. Strong Management Team
#6. Strong Management Team Mr. Nandakumar G GM & Chief of Internal Vigilance, 31 years Associated with SIB for more than 27 years. Head of Inspection and Vigilance. Vast experience across business functions like Branch/RO management, Mr. Harikumar L Retail Banking including Bancassurance and Marketi
Slide 24: #6. Strong Management Team
#6. Strong Management Team Mr. Mohan T M GM & Head Legal Department , 34 years B.Com, LL.B Graduate. Also completed CAIIB and CS (Inter). More than 28 years of experience in Banking. Previous experience of more than 6 years with Income Tax Appellate Tribunal and Apollo Tyres Ltd. HeadingLegal Depart
Slide 25: Way forward - Strategy: Strategic Focus Areas
Way forward - Strategy Strategic Focus Areas • Significant progress made: • Portfolio is reasonably healthy – small pockets of weakness that we expect will flow through over time contractually • Growth in Low risk / high quality assets • Portfolio realignment - higher rated corporate, lower tenures
Slide 26: Five Areas of Focus
Five Areas of Focus • Enhancing Portfolio Resilience • Improving Branch Productivity • Cost Optimisation • Growing Non-branch Distribution & Leveraging Partnerships • Enhancing Control / Compliance Architecture
Slide 27: Enhancing Portfolio Resilience
Enhancing Portfolio Resilience • Granularising the portfolio • Building ‘Frictionless’ processes • Modifying existing LOS systems to create ‘swim-lanes’ for targeted segments • Building high-quality score-cards to facilitate risk acceptance • Modifying policies to reduce ‘wax’ and improving customer
Slide 28: Improving Branch Productivity
Improving Branch Productivity • Improving “Tooth to Tail” ratio • From 75:25 to 85:15 over time • Launched ‘Sales Value Addition’ metric to track sales activities at Branch level. • Enhancing Branch Morale and Increasing Sales Focus • Launched sales rewards from Jan. 1, 2024 • Plan is based on Sales
Slide 29: Cost Optimisation
Cost Optimisation • SIB has higher cost : income relative to its peers • Lower NIM – Large concentration of lower yield, short duration, high quality assets leading to NIM compression • Higher staffing count • Large proportion of staff in non-customer facing roles (control / risk / credit / operatio
Slide 30: Growing Non-Branch Distribution & Leveraging Partnerships
Growing Non-Branch Distribution & Leveraging Partnerships • Branch is the main source of business for the bank • Building non-branch distribution is critical. This is to be achieved in two ways: • Creating Non-branch architecture – leveraging traditional ‘non-branch’ sources • Building Partnerships
Slide 31: Annexure
Brief Snapshot Transformation Journey of the Bank About South Indian Bank – Key Highlights Annexure 30
Slide 32: Profit & Loss Overview (Standalone)
Profit & Loss Overview (Standalone) (Rs. in Crore) Rs. in Crore Q3-FY24 Q3-FY23 Y-o-Y (%) Q2-FY24 Q-o-Q (%) FY23 Net Interest Income 819 825 (1%) 830 -1% 3,012 Non Interest Income 452 (34) 1429% 356 27% 813 - Core Fee Income 179 148 21% 171 5% 569 - Treasury & Forex 158 (287) 155% 37 327% (308) - Ot
Slide 33: Balance Sheet Overview (Standalone)
Balance Sheet Overview (Standalone) (Rs. in Crore) Particulars Dec 2023 Dec 2022 Y-o-Y (%) Sep 2023 Q-o-Q (%) Capital & Liabilities 1,13,514 1,03,833 9% 1,12,743 1% Capital 209 209 0% 209 0% Reserves and Surplus 7,185 6,140 17% 6,880 4% Deposits 99,154 90,672 9% 97,085 2% Borrowings 4,213 4,773 (12%
Slide 34: Key Metrics – Quarterly
Key Metrics – Quarterly FY24 FY23 Particulars Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net Interest Margin (NIM) 3.19% 3.31% 3.34% 3.67% 3.52% 3.21% 2.74% CRAR Basel III 15.60% 16.69% 16.49% 17.25% 16.25% 16.04% 16.25% RoAA (Annualized) 1.07% 0.97% 0.73% 1.26% 0.56% 0.65% 0.46% Provision Coverage 77.97% 77.82% 76.54% 7
Slide 35: Provisions
Provisions (Rs. in Crore) Particulars Q3FY24 Q2FY24 Q3FY23 For NPA & NPI 46 70 62 For Standard Assets (10) (4) (17) For Restructured Advances/Sacrifices & FITL (15) (13) (8) For Unhedged Forex Exposure - (1) - Others 28 (1) 4 Taxes 129 134 59 Total Provisions 178 185 100 34
Slide 36: Stressed Assets
Stressed Assets Restructured Standard Advance Sector Break up (Rs. in Crore) 1,781 On Account of MSME 1,516 9% Restructuring 1,297 0% 26% General - DCCO Extention 1,159 19% 894 OTR COVID Personal Segment OTR COVID MSME 46% OTR COVID Corporate Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Covid One Time Restruc
Slide 37: Slippages & collection efficiency
Slippages & collection efficiency Segment wise NPA slippages Segment wise GNPA Rs. in Crore Q3-2024 Rs. in Crore Q3-2023 Q4-2023 Q1-2024 Q2-2024 Q3-2024 Agriculture 46 Agriculture 576 548 513 490 490 Business Loans 144 Business Loans 2,038 1,938 2,243 2,188 2,152 Personal Segment 54 Personal Segment
Slide 38: Investments
Investments Investment Book Dec 22 Mar 23 Dec 23 Details Rs. in Modified Modified Modified Rs. in Crore Rs. in Crore Crore Duration Duration Duration HTM 18,916 2.69 19,688 2.79 22,374 4.23 AFS 5,263 1.17 6,071 0.95 4,122 1.89 HFT 109 7.69 255 5.14 158 1.34 Total 24,287 2.47 26,014 2.48 26,654 3.97
Slide 39: Capital Composition
Capital Composition Risk Weighted Assets BASEL III 17.25 Rs. in Crore Dec 31, 2023 Sep 30, 2023 16.25 16.49 16.69 15.60 Total Capital 7843.86 15.60% 7,888.1 16.69% - Tier I 6726.14 13.37% 6,723.3 14.22% - Of which CET1 6226.14 12.38% 6,223.3 13.17% 14.74 14.22 13.71 14.04 13.37 - Tier II 1117.71 2.2
Slide 40: For further information, please contact
For further information, please contact: The South Indian Bank Ltd. CIN - L65191KL1929PLC001017 Ms. Chithra H, CFO chithra@sib.co.in Mr. Vinod Francis, Joint General Manager vinodfrancis@sib.co.in Mr. Prashanth George Tharakan, Head IR prashanthgt@sib.co.in www.southindianbank.com 39
Slide 41: Thank You
THANK YOU 40
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